Matt Hougan, Bitwise’s CIO, dropped a bombshell – Bitcoin is going to rocket over $200,000 this year. He places governments, corporations, and institutions on the rocket ship as the combustible fuel. As much as I respect Hougan’s analysis, particularly the supply-demand dynamics he illuminates, I think his forecast is too short-sighted. That’s akin to steering through the Singapore Strait with only a compass, while failing to check for the impending monsoon season developing on the edge of the horizon.

Geopolitics: The Unseen Hand

Hougan's analysis touches on government accumulation, but it doesn't fully grasp the why. It's not just about diversifying reserves; it's about geopolitical maneuvering. Yet we are entering a new Cold War, one marked by fractured global alliances and zero-sum economic competition. Consider Bitcoin as the new digital gold in an emerging Cold War.

Imagine China, trying to walk back from its tense embrace with crypto. It meekly pushes Bitcoin adoption further in the countries pursuing alternatives to the corrupt dollar-dominated world economic order. This isn't some far-fetched conspiracy theory. It’s not a far-fetched scenario that is quietly unfolding as countries continue to pursue de-dollarization. And suddenly, Bitcoin becomes a tool, a chess piece in a larger game.

Now, picture countries that have been sanctioned and ejected from conventional financial rails. In this context, Bitcoin increasingly becomes a lifeline, an alternative means of transacting that sits outside the watchful eye of the West. That’s not just a bad outcome, it will increasingly empower rogue states and designers of illicit activities. It's a reality that will impact demand – a demand Hougan's model might be underestimating. Fundamentally, it’s about more than returns. It’s about power and freedom.

Technology: Beyond The Obvious

Hougan’s bullish outlook is based on Bitcoin’s natural scarcity and growing institutional embrace of the asset. Fair enough. They should consider the technological disruption taking place around Bitcoin. The whole blockchain universe is changing at warp speed.

Central Bank Digital Currencies (CBDCs) are no longer a hypothetical threat—they’re being actively developed and tested. Where others view CBDCs as Bitcoin’s enemy, I consider them a forceful accelerator. They'll introduce a generation to digital currencies, legitimizing the space and potentially driving more people towards decentralized options like Bitcoin.

Novelties such as the Lightning Network are equally important. By making Bitcoin transactions faster and cheaper, we open the door for third parties to introduce exciting new use cases and increase its accessibility, especially in developing countries. Hougan’s bullish forecast ignores the fact that Bitcoin is stagnant and decomposing. That shortsightedness dismisses the amazing potential of new technology to make it much more useful and drive broader adoption.

  • CBDCs could streamline cross-border payments, but with government oversight.
  • Bitcoin offers a censorship-resistant alternative, appealing to those who value privacy and autonomy.

Hougan's analysis, while insightful, seems very Western-centric. He addresses some of the broader themes around US institutions and corporate adoption. What about Asia? The continent is home to some of the most exciting crypto innovations, adoption and use cases—and its influence will continue to strengthen.

Asian Influence: A Rising Tide

Singapore—where I’m writing from—is an example par excellence. The UK government has taken a conservative approach to the adoption of blockchain technology, encouraging innovation but establishing strong regulatory practices. Other Asian nations, such as South Korea and Japan have shown a robust interest in crypto.

China’s changing attitude toward crypto is the other big variable. While complete bans still exist, evidence is plentiful that Beijing is interested in discovering methods of incorporating blockchain technology into its economy. A slightly less punitive, or more targeted, go-around from China can create billions in new demand for bitcoin and other cryptocurrencies.

Additionally, Asia has the world’s largest and fastest-growing population of digitally connected people, most of whom lack access to or are not fully served by legacy banks. Bitcoin is a powerful tool for this, as it opens the door to financial services and empowers everyone to join the global economy. This groundswell of adoption, especially in emerging markets, has the potential to send Bitcoin’s price and trajectory into an entirely new stratosphere.

Hougan’s $200,000+ prediction just might come true. It’s important to look at the larger landscape. Bitcoin is more than an investment — it’s an economic, technological and geopolitical juggernaut. Failing to consider these factors messes up your forecasts. It’s like trying to predict the weather based solely on the temperature, obfuscating atmospheric pressure, wind patterns, and the giant super typhoon headed our way.

In short, I would be surprised if BTC isn’t at least 4x that, like 1 million+. The better question is, what are you doing to get ready for this future.

I believe that Bitcoin will be much more than $200,000. The question is, what are you doing to prepare for this future?